Call centre sector in new push to lure operators

THE business process outsourcing (BPO) industry has relaunched its marketing programmes in an effort to attract more companies to move their customer service centres to South Africa.

South Africa has tried to position itself as one of the preferred destinations for BPO and offshoring, which is largely made up of call centres. A study released by the London School of Economics last November said teh country is maturing and becoming strategic in its ability to offer voice, complex back office BPO and a shared service platform for Southern African markets.

Moreover, "its extant, strong capability" in higher value work in financial services BPO and legal processing outsourcing provides a platform for delivering on its considerable potential in these areas over the next three to five years, the report says.

The global market for call centres is dominated by India, which is strong in technical skills. South Africa’s chief competitive advantage is seen as its cultural affinity with the UK and its knowledge of English. The BPO and offshoring sector in South Africa is responsible for an estimated 16,500 jobs and is seen as a major driver for socioeconomic growth.

About five years ago the market was abuzz with many companies expressing interest in moving their customer services centres to South Africa. Some went so far as to pump millions of rand to open customer services centres in Johannesburg and Cape Town. However, in the past two years, activities seemed to have slowed with fewer companies moving their customer centres locally.

The Business Process enabling SA (BPeSA) activities in marketing the country were not aggressive. But that is set to change following the BPeSA’s relaunch last month. According to Frost and Sullivan large global BPO operators are set to dominate the country’s BPO landscape within four years through acquisitions, with offshore-related facilities, terminals and equipment set to increase from 10,000 in 2010 to 40,000 in 2015.

BPeSA’s national interim CEO Gareth Pritchard says the industry body has not been "aggressive enough".

"I don’t think we realised how good we are, we have amazing resources and infrastructure; but we are getting our act together." He says the renewed mandate is centred around job creation. "Everything should be geared towards job creation. We need a strong domestic market with skills and resources and state of the art processes to produce the highest quality of service."

To attract offshore investments, the government has introduced an incentive scheme programme. Mr Pritchard says without the incentives the sector would not have grown as it has and that many firms are taking advantage of them.

As a service destination, South Africa caters for a number of prominent international brands including Amazon, British Gas, Shell, Lufthansa, Shop Direct, TalkTalk, SwissAir, T-Mobile and IBM. More companies could outsource their customer service centres to SA in the coming months. "Our pipeline of deals is strong," says Mr Pritchard.

While South Africa’s strength in terms of customer services call centres lies in a large English-speaking talent pool that provides neutral and easy-to-understand accents together with cultural affinity to western markets, Mr Pritchard says the industry will also focus on other skills such as financial services and legal outsourcing services.

"We have an upper hand on voice services; it’s the strength across the whole value chain. We are strong in the financial services, but we are not capitalising on that," he says.

The London School of Economics report says South Africa’s long-term sustainable advantage will be based on value-added services beyond voice. The report states that although the research project respondents consider South Africa’s "sweet spot" as front-office and voice services, most participants believe that, "ultimately, no economy can be built just around call centres. International firms who outsource or erect captive call centres may easily pull out if economic conditions change".

The London School of Economics says South Africa should be marketed, as a BPO location, through a single entity, as has been achieved with great effectiveness by countries such as Poland and India. Part of that single entity’s mission will be not only to attract investors, but also to make it easy to do BPO business with South Africa as a whole, and drive the training and skills development efforts.

THE business process outsourcing (BPO) industry has relaunched its marketing programmes in an effort to attract more companies to move their customer service centres to South Africa.

South Africa has tried to position itself as one of the preferred destinations for BPO and offshoring, which is largely made up of call centres. A study released by the London School of Economics last November said teh country is maturing and becoming strategic in its ability to offer voice, complex back office BPO and a shared service platform for Southern African markets.

Moreover, "its extant, strong capability" in higher value work in financial services BPO and legal processing outsourcing provides a platform for delivering on its considerable potential in these areas over the next three to five years, the report says.

The global market for call centres is dominated by India, which is strong in technical skills. South Africa’s chief competitive advantage is seen as its cultural affinity with the UK and its knowledge of English. The BPO and offshoring sector in South Africa is responsible for an estimated 16,500 jobs and is seen as a major driver for socioeconomic growth.

About five years ago the market was abuzz with many companies expressing interest in moving their customer services centres to South Africa. Some went so far as to pump millions of rand to open customer services centres in Johannesburg and Cape Town. However, in the past two years, activities seemed to have slowed with fewer companies moving their customer centres locally.

The Business Process enabling SA (BPeSA) activities in marketing the country were not aggressive. But that is set to change following the BPeSA’s relaunch last month. According to Frost and Sullivan large global BPO operators are set to dominate the country’s BPO landscape within four years through acquisitions, with offshore-related facilities, terminals and equipment set to increase from 10,000 in 2010 to 40,000 in 2015.

BPeSA’s national interim CEO Gareth Pritchard says the industry body has not been "aggressive enough".

"I don’t think we realised how good we are, we have amazing resources and infrastructure; but we are getting our act together." He says the renewed mandate is centred around job creation. "Everything should be geared towards job creation. We need a strong domestic market with skills and resources and state of the art processes to produce the highest quality of service."

To attract offshore investments, the government has introduced an incentive scheme programme. Mr Pritchard says without the incentives the sector would not have grown as it has and that many firms are taking advantage of them.

As a service destination, South Africa caters for a number of prominent international brands including Amazon, British Gas, Shell, Lufthansa, Shop Direct, TalkTalk, SwissAir, T-Mobile and IBM. More companies could outsource their customer service centres to SA in the coming months. "Our pipeline of deals is strong," says Mr Pritchard.

While South Africa’s strength in terms of customer services call centres lies in a large English-speaking talent pool that provides neutral and easy-to-understand accents together with cultural affinity to western markets, Mr Pritchard says the industry will also focus on other skills such as financial services and legal outsourcing services.

"We have an upper hand on voice services; it’s the strength across the whole value chain. We are strong in the financial services, but we are not capitalising on that," he says.

The London School of Economics report says South Africa’s long-term sustainable advantage will be based on value-added services beyond voice. The report states that although the research project respondents consider South Africa’s "sweet spot" as front-office and voice services, most participants believe that, "ultimately, no economy can be built just around call centres. International firms who outsource or erect captive call centres may easily pull out if economic conditions change".

The London School of Economics says South Africa should be marketed, as a BPO location, through a single entity, as has been achieved with great effectiveness by countries such as Poland and India. Part of that single entity’s mission will be not only to attract investors, but also to make it easy to do BPO business with South Africa as a whole, and drive the training and skills development efforts.

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